Christopher O'Sullivan (Cork South-West, Fianna Fail)

I agree with quite a lot of what the Deputy had to say. He said that retrofitting the private rental sector would be good for everyone. I agree with him on that. He spoke about 100% renewables being the target. I agree with that target. That is what we should be aiming for and striving towards. The conditions described by the constituent who wrote to him are not good enough and should not be supported. In terms of the provision of HAP, with regard to anyone in that situation, the landlord should not be supported in that regard when one considers what they were going through.

However, I do not believe this is the way to do it because of the other impacts it would have, particularly with regard to the rental sector and the provision of accommodation. This is particularly the case with the deadlines the Deputy has indicated within the legislation. I often hear the Opposition quoting the ESRI when that suits its argument but the Opposition cannot just disregard the ESRI and label it as propaganda when it does not suit its argument. I will go into more detail about what the ESRI report did.

In the programme for Government, Securing Ireland’s Future, the Government has set out its commitment to making Ireland's buildings more sustainable and energy efficient, reducing reliance on fossil fuels and lowering energy costs for households. More specifically, in the Government’s new housing plan, Delivering Homes, Building Communities 2025-2030, published which was last week, there is a commitment to examining policy measures to incentivise increased energy efficiency in the private rental market. This action is aimed at improving the quality of housing stock available to rent and contributing to meeting our overall national climate targets in relation to emissions reduction. It aims to increase energy efficiency and help to alleviate fuel poverty, protect tenants’ health and improve comfort levels in rental homes.

I note that the main objectives of this Bill as initiated are to require residential rental stock to have a minimum BER of D2 by December 2026, C1 by December 2028 and B2 by December 2030. The Government understands that the Bill is a genuine attempt to improve the position for people currently renting property in the private rental sector and appreciates the progressive intentions underpinning it. While the intent of the Bill is clear and the objective of improving the energy efficiency in residential rental properties is a worthy one, the Government is not in a position to support the Bill and has taken the decision to oppose it. Any proposed changes of this nature must be given very careful consideration and it is the Government’s view that the Bill as drafted would have serious unintended consequences.

Despite its positive intentions, the Bill is highly likely to have a detrimental and disruptive effect on the supply and availability of a large number of rental properties. lf implemented as proposed, it would render a significant number of currently rented dwellings unsuitable for letting in the private rental market. Earlier this year, the ESRI published its report, entitled "Exploring investment requirements for energy efficiency upgrades in the private rental sector". The report is publicly available on the ESRI website. This study was commissioned by my Department so that we would have the independent information needed to further our understanding of the level of investment needed to upgrade energy efficiency levels in the private rental sector.

The ESRI report found four in five rented dwellings currently have a BER below B. That would equate to over 260,000 properties out of a total of 330,000 dwellings in the private rental sector, using the 2022 figures. The report estimates over 45,000 rented dwellings have low energy efficiency ratings with BERs of E, F or G. Under this Bill they would all be unsuitable for renting from 31 December 2026 with the introduction of the minimum D2 requirement, unless appropriate retrofit works were undertaken by landlords. A further 155,000 rental units would be unsuitable for renting with the introduction of a minimum C1 requirement by December 2028. An additional 66,000 units would be impacted by a minimum B2 rating by December 2030. In all, some 266,000 private rental units would need to have their energy rating improved by December 2030. The report estimates the aggregate cost of upgrading the housing stock of residential rental properties to a B1 or B2 would be in the region of €7 billion to €8 billion in 2023 prices. It found the average cost of retrofitting would be €30,200 based on 2023 prices. The report also found nearly one in two landlords would have insufficient own funds to cover the €25,000 investment and some are likely to have difficulties obtaining the finance. While the report highlights issues in respect of the ability of some landlords to invest in energy retrofits of their residential properties, it states willingness to invest may be an ongoing challenge and minimum BERs may lead to a reappraisal of the attractiveness of investment, and divestment by some owners.

The consequences for the private rental market of this Bill could therefore be very significant, with the potential for thousands of existing landlords to exit the rental market. This would reduce the supply available for tenants in a market that is already seriously constrained. The exit of properties housing social housing tenants in receipt of HAP would likely result in significant increases in presentations to homeless services and increased demands for homeless emergency accommodation. It would also reduce the supply of properties for prospective HAP tenants, which would also likely lead to increased homeless presentations.

It is important to point out here there are a range of Government supports in place to improve energy efficiency of accommodation in the private rental sector. In budget 2026 we announced record funding of €558 million for Sustainable Energy Authority of Ireland residential and community energy upgrade schemes. This is an increase of €89 million on 2025’s budget allocation to support delivery of the national retrofit plan. As part of Ireland's national retrofit plan, the Government launched a new package of supports targeting homes that were built and occupied pre-2011. These supports, which have been made available to non-corporate landlords and approved housing bodies to improve the efficiency of their rental properties, include: the national home energy upgrade scheme, which provides generous grant support for private landlords with higher supports available for AHBs; the better energy homes scheme, which provides support to landlords for step-by-step retrofits; the facility whereby private landlords can also receive support to upgrade their properties under the community energy grant scheme; and 80% grants available to landlords for attic and cavity wall insulation, which are low-cost measures that can be installed quickly and cost-effectively. A tax incentive is also now in place to encourage small-scale landlords to undertake retrofitting works while the tenant remains in situ, under section 32 of the Finance Act 2022. This measure provides for a tax deduction of up to €10,000 per property, against case V rental income for certain retrofitting expenses incurred by the landlord on rented residential properties, for a maximum of two rental properties. Budget 2026 extended the tax incentive for a further three years to end 2028. The home energy upgrade loan scheme launched in 2024 enables homeowners, including non-corporate landlords, to borrow between €5,000 and €75,000 at significantly lower interest rates to complete a home energy upgrade. The Department of Climate, Energy and the Environment, together with the Sustainable Energy Authority of Ireland, continually keeps grant schemes under review, including terms and conditions, eligibility criteria and rates, and takes account of relevant factors such as demand, research, innovation and evolving technology.

I also take the opportunity to assure the House the Government is committed to ensuring a stock of high-quality accommodation is available for those who live in the private rented sector. The standards for rental accommodation are prescribed in the Housing (Standards for Rented Houses) Regulations 2019. They specify requirements in relation to a range of matters, such as structural repair, sanitary facilities, heating, ventilation, natural light, fire safety and the safety of gas, oil and electrical supplies. Responsibility for the enforcement of the regulations in the private rental sector rests with local authorities. My Department’s policy of setting private rental inspection targets for each local authority and providing ring-fenced Exchequer funding to help them reach those targets is working and has resulted in significant increases in inspection and compliance levels across the private rental sector. This reflects a concerted and focused effort by my Department, working in close partnership with local government. Inspections have increased from an average of 20,000 a year in the period 2005 to 2017 to over 49,000 in 2022. There were over 63,500 inspections in 2023 and an all-time high of over 80,000 inspections last year. Preliminary data for the first six months of 2025 shows an increase of over 5% on the same period last year. There has also been an increase in the Exchequer funding being made available to support this work. My Department will provide €10.5 million to local authorities this year to help them meet their private rental inspection targets.

I will conclude by once again thanking Deputies Coppinger and Murphy for initiating this Bill and the Ceann Comhairle for facilitating this discussion. Given the potential unintended consequences of this Bill and its potential serious impact on the private rental sector the Government has taken the decision it cannot support it at this time.

To expand a bit, the figures also highlight that there are too many properties in the private rental sector that are at too low a BER. The reason the Government is opposing the Bill is we feel the timelines, which have been outlined for achieving the higher ratings, would result in the loss of a significant amount of private rental accommodation from the market - and the ESRI report backs that - at a time when so much time is in this House is dedicated to debating the lack of housing provision and accommodation throughout Ireland, which has led to some of the figures we talked about a while ago.

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